Personal loans are becoming more popular with time. More people are considering it compared to other alternatives. It is even outpacing credit cards, mortgages and auto loans. There are so many personal loan lenders out there. Due to the increasing competition, most of them, especially the upcoming ones, have compromised lending terms. This has perhaps contributed to the increase in the popularity of these loans. In this blog, we are going to examine at least 7 factors behind the popularity of personal loans.
The benefits offered
It is human nature to go for what is more advantageous. No one would choose something that is less beneficial over the one that offers so much. Personal lenders provide so many benefits to the borrowers and for this reason, it has more followers. Some of these benefits include;
1. Lower interest rates
Unlike other lenders, personal providers pose little interest. Their interest can be as low as 5% or 6% at most. This is an incredible deal for a borrower. We all know that loan lenders make huge profits by charging high interest on the loans they lend out. They know that you will take the money out of desperation without considering the high rate. Sadly, the pinch is felt when paying back!
2. Longer repayment periods
Personal loans often have a repayment term of up to 5 years. With an unsecured loan, you can be given 7 or more years. Yes, I know it sounds too good to be true but it’s real.
This gives you peace of mind because you won’t receive reminder calls or daily emails from your loan providers. You wouldn’t want to experience that either. From experience, it is terrible!
3. Have generous limits
Personal loan offers a comparatively large amount of loans. In many cases, you can be given a principal of $25,000-$30,000, sometimes even up to $100,000. Go for personal loans in case you are desperate for funds and you can be sure of not being disappointed.
4. Good payment methods
Unsecured loans don’t require collaterals. However, you need to be ready for the dire consequences. It is better to know that your property will be taken away other than having no idea of what the lender might do to cover the loan. The outcome might be much worse than posing your hard-earned wealth.
5. Increase in emergencies
Unexpected situations are one of the main reasons as to why people opt for loans, personal loans to be precise. Some lenders give loans the same day you apply for it or within a maximum of 2 days. Emergencies are not planned for and that’s why reliable loan providers are needed.
When faced with a huge medical bill that needs an immediate solution, personal loans save. Probably you have experienced emergency vehicles broke down. Let’s say you had planned for an important business trip and in the middle of it, your car breaks down. Your account is nil. And your only hope was the few coins you would save from the stipends provided by your employer. At this point, you wouldn’t want to miss the trip. No doubt you will be relieved by an emergency personal loan. It is because of this convenience that personal loans are preferred by many.
6. The call of starting a business
Starting a business requires financial assistance. Luckily, this is offered by personal loans. Many businesses have been financed by personal lenders. Why so? Starting a business has a lot of risks. Although you can predict the outcome of it, you cannot be 100% sure. Whatever the outcome, the loaners will want their money paid back at the agreed time. With a personal loan, you have all the time to look for a way of paying back in case the business doesn’t work out.
7. Trying to keep up with a lifestyle
Everyone is trying to have a comfortable life regardless of the prevailing economic conditions. The mistake done by many is trying to live a life that is beyond their means. People go as far as taking huge loans just to keep up with the extravagant lifestyle. The personal loan becomes the best option for them as it has fewer requirements. It helps them pay for that expensive car, the vacation they have always wanted and other unnecessary expenses. It is not a bad thing to enjoy life, but go with what you can afford. Don’ try to have a lifestyle of a millionaire when you are far from being one. The desire to maintain lifestyles has pushed many to rely on personal loans.
8. Poor money management
According to research in Singapore, most people who take loans are not poor. They have money but they misuse it. Sometimes money mismanagement is not out of carelessness. Having no financial goal is one of the main reasons why people misuse funds. As a result, one ends up broke and taking a personal loan is the only option.
9. To meet the tax requirements
High taxation greatly hurts your bank account. Sadly, the more you earn the more tax you are charged. Even those with home businesses are required to pay.
According to instantloan.sg, personal loans have become a great source of refuge for individuals who are unable to meet the tax requirements from their low income.
10. The increase in personal loaners
It is logical to make your services more available if you want it to benefit thousands of people. The rise in the number of lenders has increased the chances of using it. Its flexibility has earned the trust of individuals worldwide. No wonder it is becoming more and more popular as the years go by.
The Bottom Line
This blog has outlined the main 7 reasons behind the increase in personal loans. Do you need a loan? All you need to do is to familiarize yourself with the terms of lending. Examine offers from different lenders to make the best decision. Remember to shop for the interest rate. You aim to get the cheapest loan that can serve the purpose. However, do not borrow more than you need. We wish you the best. In case you need instant cash, try payday loan and sort your problems.